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Press release from GlobeNewswire (a Nasdaq OMX company)

Coffee Holding Co., Inc. Reports Results for the Three Months Ended January 31, 2012

Friday, March 09, 2012

Coffee Holding Co., Inc. Reports Results for the Three Months Ended January 31, 201206:00 EST Friday, March 09, 2012STATEN ISLAND, N.Y., March 9, 2012 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. ("Coffee Holding" or the "Company") (Nasdaq:JVA) today announced its operating results for the three months ended January 31, 2012. In this release, the Company: Reports sales growth of 120% which increased to net sales of $56,601,684 for the three months ended January 31, 2012 and $25,641,093 for the three months ended January 31, 2011; and    Reports net income of $1,578,345, or $0.25 per share basic and $0.24 per share diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072, or $0.19 per share (basic and diluted), for the three months ended January 31, 2011.Results of Operations The Company had net income of $1,578,345, or $0.25 per share basic and $0.24 diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072 or $0.19 per share (basic and diluted), for the three months ended January 31, 2011. The increase in net income primarily reflects increased gross profit. Net sales totaled $56,601,684 for the three months ended January 31, 2012, an increase of $30,960,591, or 120%, from $25,641,093 for the three months ended January 31, 2011. The increase in net sales primarily reflects higher sales prices compared to the first quarter of fiscal 2011 and an increase in sales of green coffee, as well as an increase in private label and branded sales. Cost of sales for the three months ended January 31, 2012 was $52,151,940 or 92.1% of net sales, as compared to $22,560,399 or 87.9% of net sales for the three months ended January 31, 2011. The increase in cost of sales reflects the increased cost of sales, as well as the shift in our overall business to a higher percentage of green coffee sales as compared to roasted coffee sales which tend to be less profitable on a percentage basis than our roasted products.   Total operating expenses increased by $143,396, or 8.5%, to $1,829,492 for the three months ended January 31, 2012 as compared to operating expenses of $1,686,096 for the three months ended January 31, 2011. The increase in operating expenses was due to increases in selling and administrative expense of $176,088 partially offset by a decrease in officers' salaries of $32,692. "We are pleased to report a strong quarter in both revenues and earnings to our shareholders.  We continue to see growth in all areas of our business as continued historically high coffee prices have not affected demand.  Increased sales on our flagship brand, Cafe Caribe, have come through new outlets of distribution as four new major supermarket chains have taken on the product since the start of the year.  Private label sales continue to grow as well, with consumers looking to save as the economy is still on the mend.  In addition green coffee sales increased, as the demand for our high quality Arabicas and Organic coffees remains brisk.  Although our margins remain strong, higher increases in sales of green coffee as compared to increases in private label and branded sales have impacted our overall gross margins.  That said, we will always take growth as long as it is profitable," said Andrew Gordon, President & CEO.Quarterly Dividend The Company's previously announced quarterly cash dividend of $0.03 per share will be paid to stockholders of record as of the close of business on April 17, 2012. The dividend will be paid on April 30, 2012. About Coffee Holding Coffee Holding is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family-operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company's private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi-unit retail customers. Any statements that are not historical facts contained in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  We have based these forward-looking statements upon information available to management as of the date of this release and management's expectations and projections about certain future events. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, coffee prices, pricing of our products, market acceptance, the effect of economic conditions, intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.COFFEE HOLDING CO., INC.CONDENSED CONSOLIDATED BALANCE SHEETSJANUARY 31, 2012 AND OCTOBER 31, 2011        January 31, 2012October 31, 2011  (unaudited)  - ASSETS -    CURRENT ASSETS:     Cash $ 7,362,778  $ 4,244,335 Accounts receivable, net of allowances of $269,611 for 2012 and 201117,959,441 16,021,581 Inventories11,978,110 13,475,855 Prepaid green coffee236,718 388,754 Prepaid expenses and other current assets231,911 275,679 Prepaid and refundable income taxes110,215 377,972 Deferred income tax asset254,441 896,400TOTAL CURRENT ASSETS38,133,614 35,680,576 Machinery and equipment, at cost, net of accumulated depreciation of $2,302,384 and $2,191,566 for 2012 and 2011, respectively1,605,531 1,661,759 Customer list and relationships, net of accumulated amortization of $13,125 and $11,250 for 2012 and 2011, respectively136,875 138,750 Trademarks180,000 180,000 Goodwill440,000 440,000 Deferred income tax asset7,059 -- Deposits and other assets883,679 677,606TOTAL ASSETS $ 41,386,758  $ 38,778,691- LIABILITIES AND STOCKHOLDERS' EQUITY -    CURRENT LIABILITIES:     Accounts payable and accrued expenses $ 15,161,172  $ 12,379,414 Line of credit1,795,998 1,820,109 Due to broker290,264 1,867,558 Income taxes payable36,018 100TOTAL CURRENT LIABILITIES17,283,452 16,067,181       Deferred income tax liabilities -- 35,900 Deferred rent payable151,858 146,921 Deferred compensation payable569,790 538,707TOTAL LIABILITIES18,005,100 16,788,709STOCKHOLDERS' EQUITY:     Coffee Holding Co., Inc. stockholders' equity:     Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 0 issued -- -- Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,372,309 shares outstanding for 2012 and 20116,456 6,456 Additional paid-in capital15,884,609 15,884,609 Contingent consideration19,500 19,500 Retained earnings7,652,978 6,268,326 Less: Treasury stock, 89,007 common shares, at cost for 2012 and 2011(272,133) (272,133) Total Coffee Holding Co., Inc. Stockholders' Equity23,291,410 21,906,758 Noncontrolling interest90,248 83,224TOTAL EQUITY23,381,658 21,989,982TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 41,386,758  $ 38,778,691       See notes to Condensed Consolidated Financial Statements.      COFFEE HOLDING CO., INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOMETHREE MONTHS ENDED JANUARY 31, 2012 AND 2011(Unaudited)         20122011NET SALES$ 56,601,684 $ 25,641,093       COST OF SALES (which includes purchases of approximately $10.5 million and $4.8 million for the three months ended January 31, 2012 and 2011, respectively from a related party)52,151,940 22,560,399       GROSS PROFIT4,449,744 3,080,694       OPERATING EXPENSES:     Selling and administrative1,682,334 1,506,246 Officers' salaries147,158 179,850TOTAL1,829,492 1,686,096       INCOME FROM OPERATIONS2,620,252 1,394,598       OTHER INCOME (EXPENSE):     Interest income13,884 160,586 Loss from equity investment(20,137)-- Interest expense(65,730) (112,636)TOTALS(71,983) 47,950       INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST IN SUBSIDIARY2,548,269 1,442,548        Provision for income taxes962,900 391,417              NET INCOME BEFORE NONCONTROLLING INTEREST IN SUBSIDIARY1,585,369 1,051,131 Less: Net income attributable to the noncontrolling interest(7,024) (10,059)       NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.$ 1,578,345 $ 1,041,072        Basic earnings per share$ .25 $ .19        Diluted earnings per share$ .24 $ .19        Dividends declared per share$ .03 $ .03        Weighted average common shares outstanding:     Basic6,372,309 5,490,823 Diluted6,644,309 5,500,823       See notes to Condensed Consolidated Financial Statements.      COFFEE HOLDING CO., INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSTHREE MONTHS ENDED JANUARY 31, 2012 AND 2011(Unaudited)         20122011OPERATING ACTIVITIES:     Net income$ 1,585,369 $ 1,051,131 Adjustments to reconcile net income to net cash provided by operating activities:     Depreciation and amortization112,693 111,066 Unrealized (gain) loss on commodities(1,577,294) 154,437 Loss from equity investment20,137 -- Bad debt expense-- -- Deferred rent4,937 5,541 Deferred income taxes599,000 (113,500) Changes in operating assets and liabilities:     Accounts receivable(1,937,860) (1,594,361) Inventories1,497,745 1,276,257 Prepaid expenses and other current assets43,768 119,549 Prepaid green coffee152,036 971,943 Prepaid and refundable income taxes267,757 (123,141) Accounts payable and accrued expenses2,781,754 158,225 Deposits and other assets4,873 4,872 Income taxes payable35,918 (36,541)Net cash provided by operating activities3,590,833 1,985,478       INVESTING ACTIVITIES:     Equity investment(200,000) -- Purchases of machinery and equipment(54,590) (132,506)Net cash used in investing activities(254,590) (132,506)       FINANCING ACTIVITIES:     Advances under bank line of credit48,525,026 20,690,112 Principal payments under bank line of credit(48,549,137) (21,180,002) Payment of dividend(193,689) (166,989)Net cash used in financing activities(217,800) (656,879)       NET INCREASE IN CASH3,118,443 1,196,093       CASH, BEGINNING OF PERIOD4,244,335 1,672,921       CASH, END OF PERIOD$ 7,362,778 $ 2,869,014       SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:     Interest paid$ 71,340 $ 116,675 Income taxes paid$ 60,225 $ 659,773       See notes to Condensed Consolidated Financial Statements.    CONTACT: Coffee Holding Co., Inc. Andrew Gordon, President & CEO (718) 832-0800